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Tag Archives: bank runs

America’s most powerful weapon of war does not shoot, fly or explode. It’s not a submarine, plane, tank or laser. America’s most powerful strategic weapon today is the dollar.

The U.S. uses the dollar strategically to reward friends and punish enemies. The use of the dollar as a weapon is not limited to trade wars and currency wars, although the dollar is used tactically in those disputes. The dollar is much more powerful than that.

The dollar can be used for regime change by creating hyperinflation, bank runs and domestic dissent in countries targeted by the U.S. The U.S. can depose the governments of its adversaries, or at least blunt their policies without firing a shot. Continue reading →

The European Central Bank has unveiled a new set of banking plans that will allow failing banks to freeze their deposits in the event of an economic catastrophe to prevent further bank failures.

The European Central Bank has unveiled a new set of banking plans that will allow failing banks to freeze their deposits in the event of an economic catastrophe to prevent further bank failures. Continue reading →

The hunt for money is intensifying with the aid of banks no less. India was the balloon. They simply canceled the current with no notice and imposed a 90% tax on anyone holding the high denomination notes. This is how the world governments operate. The first bail-in was done in Cyprus. We were even contacted by members of the government trying to push back against the EU. We provided the solution, but the government did what the EU wanted because this was a test. If they got away with it in Cyprus, then the “bail-in” would become a contagion. The politicians lied, as usual, and said that policy would NEVER be applied in Europe. It is now standard around the world. We warned, Cyprus, then Greece – who would be next. Continue reading →

Collapsing commodities prices, erratic market turmoil and the bursting of Chinese bubbles are leading to a crisis in confidence in the economic system across the globe. The long-expected crisis to which the global financial and systemic crisis in 2008 may have been a mere prelude may be upon us.

Governments have no appetite for further bailouts. The EU states have passed legislation which will make the banks or rather unfortunate and unsuspecting depositors liable for the bank’s lending and speculative profligacy. Continue reading →

You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

The financial system is predominantly comprised of digital money. Actual physical Dollars bills and coins only amount to $1.36 trillion. This is only a little over 10% of the $10 trillion sitting in bank accounts. And it’s a tiny fraction of the $20 trillion in stocks, $38 trillion in bonds and $58 trillion in credit instruments floating around the system.

Suffice to say, if a significant percentage of people ever actually moved their money into physical cash, it could very quickly become a systemic problem.

Indeed, this is precisely what caused the 2008 meltdown, when nearly 24% of the assets in Money Market funds were liquidated in the course of four weeks. The ensuing liquidity crush nearly imploded the system. Continue reading →

As it turns out, the Greek crisis ends not with a bang, but with a referendum.

It has been easy to ignore the doings in Greece for the past few years, with the perpetual series of summits in Brussels that never seem to resolve anything. But it’s time to pay attention. These next few days are shaping up to become a transformational moment in the 60-year project of building a unified Europe. We just don’t yet know what sort of transformation it will be.

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Whatever the exact phrasing of the question (and assuming the referendum goes forward as planned), it really boils down to this simple choice: Continue reading →

Although estimates vary, Kathimerini, citing Greek banking officials, puts Friday’s deposit outflow at €1.7 billion. If true, that would mark a serious step up from the estimated €1.2 billion that left the banking system on Thursday and serves to underscore just how critical the ECB’s emergency decision to lift the ELA cap by €1.8 billion truly was. “Banks expressed relief following Frankfurt’s reaction, acknowledging that Friday could have ended very differently without a new cash injection,” the Greek daily said, adding that the ECB’s expectation of “a positive outcome in Monday’s meeting”, suggests ELA could be frozen if the stalemate remains after leaders convene the ad hoc summit. Bloomberg has more on the summit:

Dorothea Lambros stood outside an HSBC branch in central Athens on Friday afternoon, an envelope stuffed with cash in one hand and a 38,000 euro ($43,000) cashier’s check in the other.

She was a few minutes too late to make her deposit at the London-based bank. She was too scared to take her life-savings back to her Greek bank. She worried it wouldn’t survive the weekend.

“I don’t know what happens on Monday,” said Lambros, a 58-year-old government employee.

Yesterday evening, after what had been a dramatic surge in the Greek bank run which has resulted in over €3 billion in cash withdrawn through Thursday night, the Greek central bank requested an emergency cash dispensation from the ECB under the country’s Emergency Liquidity Assistance program, just one day after the ECB granted the latest €1.1 billion expansion in the ELA. Rarlier today, in an unscheduled session, the ECB did as requested, however it granted Greece far less than the amount it sought, and according to MarketNews reports, the ECB gave Greece just €1.8 billion in addition funds. Continue reading →

The European Central Bank (ECB) has raised the funding cap on its Emergency Liquidity Assistance (ELA) for Greece’s banks, according to a CNBC source.

The decision, made in a conference call Friday and first reported by Reuters, followed a meeting of the euro zone’s finance ministers on Thursday, where the ability of the country’s lenders to open up for business next week was questioned.

It comes as a specter of a run on Greek banks is looming, after yet another round of failed rescue-for-reforms talks.

The previous post quotes what Benoit said. These ‘experts’ don’t even know what they’re talking about or which lies they have to cover up from the previous day. They suffer instant amnesia syndrome. Or, perhaps they’re intentionally blurring the facts so that people don’t see the system is about to teeter into collapse or give false hope that everything is stable. This keeps riots and panic off the streets… until the mask comes off.

Update: what else – an official denial: EU OFFICIAL: ECB DIDN’T SAY GREEK BANKS MAY NOT OPEN MONDAY

So, Benoit did not say what he said?

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Just minutes after Greek FinMin Varoufakis warned people were trying to “incite capital flight” from Greece and Dijsselbloem stated that “capital outflows from Greece are worrying,” Reuters is reporting that The ECB dropped the bank run hammer: Continue reading →

Greece’s spiralling debt crisis saw cash withdrawals total €400m on Monday. While anxiety varies around Athens, few Greeks see benefit in leaving the euro

“Everybody’s doing it,” said Joanna Christofosaki, in front of a Eurobank cash dispenser in the leafy Athens neighbourhood of Kolonaki. “Our friends have all done it. Nobody wants their money to be worthless tomorrow. Nobody wants to be unable to get at it.”

A researcher in the archaeology department at the Academy of Athens, Christofosaki said she knew plenty of people who had “€10,000 somewhere at home” and plenty of others who chose to keep their stash at the office. Was she among them? “If I was, I certainly wouldn’t tell you.” Continue reading →

The situation in Greece has escalated meaningfully since last week. After the IMF effectively threw in the towel and sent its negotiating team back to Washington on Thursday, EU and Greek officials agreed to meet in Brussels over the weekend in what was billed as a last ditch effort to end a long-running impasse and salvage some manner of deal in time to allow for the disbursement of at least part of the final tranche of aid ‘due’ to Greece under its second bailout program. Talks collapsed on Sunday however as Greek PM Alexis Tsipras, under pressure from the Left Platform, refused (again) to compromise on pension reform and the VAT, which are “red lines” for both the IMF and for Syriza party hardliners. Continue reading →

The stories are all over the Internet. Governments are forcing us into a cashless society. Supposedly the pretext is terrorism, and the real reason is to take more control. No doubt more power appeals to politicians, and banning cash seems like the next step after mandatory reporting of cash transactions. However, I think there is a more serious driver than simple power lust.

A more compelling case is that cash banning is the logical follow up to bail-ins. Most people think a bail-in is when banks steal your deposit. So it seems to make sense that governments want to force people to keep their cash in the bank. Then they are easy meat for the next bail-in. Continue reading →